Real estate tips for seniors
Folks are outliving their money thanks to so many Americans quitting the smokes when the surgeon general officially announced in 1964 that smoking can kill you.
The quitters really jumped on the bandwagon after most advertising was banned in 1971.
Medical advances and technology are also explains this longer living and health craze. In 1977, the average life expectancy for an American was around 70 and now it is near 80. Social Security and many pension plans have been slow to react to this life longevity and is one of the reasons both are worried about their ability to handle this unfunded liability.
OK, back to the topic: Here are some senior real estate tips and benefits for our huge population of seniors and some property tax ideas that can be found on the terrific Solano County Tax Assessors website.
The Parents to Child and Grandparents to Grandchild exemption: This allows parents and grandparents to sell their residence to their kids or grandkids and maintain the lower assessed value for lower taxes. For example, Grandpa wants to move to Sun City and sell his Vacaville house that has been in the family for 50 years. Rather than sell it to a stranger, he sells it to his daughter so that the house stays in the family and the daughter gets a much lower tax bill than if she bought the same house from a stranger.
Mortgage note: Did you know that a parent or grandparent can sell a home to a child or grandchild and with a relatively small gift of equity? The kids can purchase the family home with little or no money down.
The “Over 55 Move Down Exemption” (as I call it): This allows a person over 55 to move from his very large, high-maintenance home to a smaller, less expensive home and bring their assessed value with them. For example, 80-year-old Grandma lives in a four bedroom two-story house with a pool that she has owned for 40 years. She decides to move down and simplify her life to a low maintenance, two bedroom, one story home in Leisure Town. Our county allows grandma to maintain her property tax from the old house, which may be only $1,500 per year in comparison to $3,600 that she would be paying if she bought a home for $320,000 without this benefit.
The Reverse Mortgage business is increasing by 10 to 15 percent per year and is always something to consider if affordability becomes an issue for a senior sitting on a large amount of home equity.
Wills and trusts need to be considered for real estate equity and wealth. Even though we are living a lot longer, no one lives forever. Don’t procrastinate and deal with this when it is too late. We have a bunch of ethical lawyers and financial advisers in this county to help with estate planning.
For more information about your real estate options, contact a local real estate professional and get some advice.